New analysis conducted by conversion rate specialists has looked into the effect that invalid online codes are having across different retail sectors, with almost 1.6% of potential online sales lost each month due to faulty or expired codes.
The research found that on average, 3.91% of unique visitors to online retailers involve the visitor attempting to use a voucher code. The conversion rate of a working code (55%) compared to a non-working code (14%) is a significantly substantial stat.
In total, invalid voucher codes lose UK retailers 425,000 online sales per month.
The analysis has been conducted by conversion rate specialists – and pioneers of world-first analytics product Smarter Codes – www.smarterclick.com. The team used a mixture of data compiled from their own clients alongside UK retail statistics to form findings.
Using data compiled from its vast client base and how codes are implemented across the board, the team were able to determine that an average of 3.91% of unique visitors to retailers’ websites involve the visitor attempting to use a voucher code.
Of the online customers that attempted to use a voucher code when making a purchase, it was found that the conversion rate varied drastically depending on whether a code was working or not; with the conversion rate for a working code emerging at 54.6%, and that of a non-working code just 14.1%.
Using Comscore’s report that ascertained UK online fashion retailers received 26,768,000 unique visitors in one month, the team were able to work out that UK fashion retailers lose 424,075 online sales every month due to mishandled codes practice.
Looking at their own data, the team also found that between 15%-40% of codes attempted on their clients’ websites were found to be faulty, with the average coming in at 25%. For some of the bigger brands this resulted in as many as 50,000 invalid code attempts every month.
From a cross section of retailers working with Smarter Click, it was found that the average basket value was 8.2% higher when a discount code was successfully implemented, proving that the voucher code industry does have an incremental part to play in the industry, but that quality drives performance.
One particular retailer received 85,000 code attempts over the course of 90 days, with 25% (21,250) of the codes entered being invalid. From the research, it was found that swapping invalid codes for working ones would have resulted in an additional £250,000 per quarter for the brand, or £1 million over the course of a year, in incremental revenue.
Commenting on the findings of the study, Ennis Al-Saiegh, CEO of www.smarterclick.com, said: “It may come as a surprise to many that something as seemingly inconsequential as a broken code can have such an effect on an online retailer, but this was our very reason for setting up Smarter Codes. Not only do retailers lose out on potential customers and create poor customer experiences, but also on the average order value of those that remain, amounting to a substantial loss in annual revenue.”